MARKET CLOSE (4.30pm AEDT)
The Australian sharemarket lost ground for the fourth time in
five days today with the All Ordinaries index (XAO) easing 0.3
pct or 13.1 pts to 4233.6. The market was split in half today
with the energy, industrial, healthcare and telecommunication
services all ending higher however weakness from the mining and
financial sectors was enough to drag the broader market into the
Last week the Australian sharemarket fell by more than 2.5
pct, shares in the U.S dropped by 3 pct, France's CAC40 index
fell 5.3 pct, the U.K's FTSE slumped by 3.29 pct while Germany's
DAX plummeted by 4.24 pct.
In terms of the weighting of the different sectors which make
up the S&P/ASX 200 index, the financials currently make up
around 38 pct of the index, the miners account for around 24 pct,
consumer services such as the retailers make up 11 pct while the
remaining sectors account for the balance.
The S&P/ASX 200 Materials index (a measure of how the
miners have performed for the day) fell 0.94 pct or 106.4 pts to
11225.6 with the world's third largest miner RIO Tinto (
) falling by 1.72 pct or $1.15 to $65.90 while the larger BHP
) eased by 0.64 pct or 23 cents to $35.90.
The S&P/ASX 200 Financials index (a measure of how the big
banks and financial institutions performed) dropped 0.43 pct or
17 pts to 3895.4. The fact that these sectors combined make up
around 62 pct of the Australian sharemarket was the reason for
today's weakness. ANZ Banking Group (ANZ) fell 1.55 pct or 31
cents to $19.75, National Australia Bank (NAB) slumped 1.11 pct
or 26 cents to $23.20 and Commonwealth Bank of Australia (
) eased by 0.38 pct or 18 cents to $47.5. Westpac (
) managed to rise by a modest 0.25 pct or 5 cents to $20.42.
Qantas (QAN) shares were a touch higher early in the session
with the airline expressing its optimism that an agreement would
be reached with pilots by tonight's deadline. However as the day
wore on it became clear that this would not be the case with a
QAN spokesperson saying that it 'was not possible to reach an
agreement'. A period of compulsory arbitration will now be taking
place between parties. QAN shares fell 1.2 pct or 2 cents to
This week there will be more than 450 Australian companies
holding their Annual General Meetings (AGMs) with shareholders.
Thursday will be the busiest day of them all with over 130
businesses meeting. The likes of Woolworths (WOW), Goodman
) and Jetset Travelword (JET) will all be holding their
Internet service provider iiNet (IIN) has announced its
intention to buy TransACT for $60 million one day ahead of its
AGM. TransACT is an Australian telco based in Canberra and
provides services to around 150,000 customers. IIN shares gained
8.05 pct or 19 cents to $2.55.
Agricultural markets have continued to remain subdued with the
price of corn falling while wheat ended a little higher. As an
interesting sidenote, Australia is the third largest exporter of
sugar cane accounting for around 3 pct of total global
production. Brazil makes up around 52 pct of the world's sugar
In Europe over the weekend, Spain became the fifth Eurozone
nation to change its government in only a matter of months.
Portugal, Italy, Ireland and Greece were the other highly
indebted nations in the Euro Area to change leadership over the
past few months. The European Union is made up of 27 nations
formed to facilitate trade and cooperation. The Eurozone which is
also referred to as the Euro area consists of the 17 nations
sharing the common Euro currency.
On the economic front the Australian Institute of Petroleum
(AIP) said that the national average price of unleaded petrol
rose by 1.4 cents to 143 cents a litre last week. This is despite
continued weakness in wholesale prices. Normally, you would
expect savings of around 2 to 3 cents a litre at the pump over
the next fortnight.
Commsec Economist, Savanth Sebastian said that "Petrol prices
have risen against the grain. It is disappointing to see that the
cheaper wholesale fuel prices have not flown through to pump
prices to the same extent as we expected. Granted the national
average petrol price fell sharply by almost five cents a litre in
a two week period from October 30 - November 13, however the fall
in pump prices pales in comparison with the slide in the
wholesale (terminal gate) price of petrol which is holding close
to five month lows."
Tonight will be quiet on the economic front with the main area
of focus being the U.S existing home sales data which will show
us how many properties were sold throughout North American over
the past month.
The volume of shares traded came in at 1.8 billion today,
worth $3.61 billion. 382 shares were up, 618 finished weaker and
390 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24
futures contract is down 0.12 pct or 5 pts to 4181.
Due to daylight savings, most major European markets are now
trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe
are pointing to a weaker start to trade tonight.
Dow Jones futures are currently lower, indicating that U.S
stocks could start in the red tonight when American markets open
at 1.30am (AEDT). Due to the Americans going back an hour on
November 5, U.S markets will be trading between 1.30am (AEDT) and
Turning to currencies, the Australian dollar (AUD) has lost
some ground and is trading below parity against the greenback for
the first time in over a month at US99.8 cents.
Steven Daghlian, Commsec Market Analyst
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